The Indian economy and the real estate sector in particular scaling new heights day by
day. And in the recent past the Real Estate India has emerged as one of the most
appealing investment areas for domestic as well as foreign investors.
Indian real estate has huge potential demand in almost every sector, but especially
commercial, residential, retail, industrial, hospitality, healthcare etc. But maximum
growth is attributed to its growth from the booming IT sector, since an estimated 70
per cent of the new construction is for the IT sector.
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The investment attitude has undergone a radical change in India. Earlier the
investors used to invests mainly in equity bonds, share certificates etc, now with the
advent of all round developments in the field of real estate, people are more inclined
in parking their money as real estate investments.
The scenario is lucrative for the foreign investors as well. And the recent easing out
of the policies for the Foreign Direct Investment (FDI), investment figures are
increasing in leaps and bounds.
Significantly, as per the latest FDI estimates released by Department of Industrial
Policy and Promotion (DIPP), the government nodal agency, the non-resident Indians
(NRIs) have contributed FDI inflows worth about US$ 41.78 million in December
2009 through the automatic route, almost 2.71 per cent of the total FDI inflows in the
same month. Total NRI FDI inflows through the period April-December 2009-10
stood at US$ 320.05 million.
1. Selling and buying Indian property is now considered as the most profitable and
attractive business opportunity in the present real estate scenario in India. New
demands have added to strength of real estate markets across the commercial,
residential and retail sectors in India. Not surprisingly, demand for Indian property has
been increasing steadily for the past few years and it has exceeded supply.
There has also been an upward swing on the real estate price values in the recent
years. Due to the huge demand and rising prices, investment and speculative interest
in real estate is growing while excess money supply, stock market gains and policy
changes are adding to the trend in favor of the real estate sector.
2. In the last one year, the capital values of the commercial office spaces has
increased by up to 40% owing to the increase in the demand from IT / ITES and BPO
sector across major metros in India.
3. India has a distinct regulatory and financing management in place.
4. Real estate boom in India is supported by its own flourishing economy on a
sustainable basis. Here, growth of the property market is not a result of renovation and
overhauling; but rapid development that witness for India riding the high growth
Factors Favoring Investments
Tremendous growth has been taking place in both residential as well as commercial
segments that is attracting huge investments phenomenal price escalation (more than
100% in several places) in last couple of years.
Lower interest rates, easy availability of housing finance, burgeoning income and
better job prospects, increase of nuclear families have given a boost to the demand for
residential properties in India. The net yields (after accounting for all outgoings) on
residential property are currently at 4-6% p.a. However, these investments have
benefited from the improving residential capital values. As such, investors can count
on potential capital gains to improve their overall returns. Capital values in the
residential sector have risen by about 25-40% p.a in the last 2 years.
The retail market in India has been growing due to increasing demand from retailers,
higher disposable incomes and opening up of FDI in Retail. The capital appreciation
in this sector is close to 20-35% p.a. However, the risks associated with this sector are
higher as retailers are prone to cyclical changes typical of a business cycle. Changing
consumer behavior combined with increasing disposable incomes will ensure further
growth of the retail sector in India.
In the present day scenario, if there is any powerful investment tool that brings
burgeoning financial returns, it is INDIAN REAL ESTATE!!! Investors should
consider the parameters minutely and meticulously to find out why investing in Indian
real estate now is the best viable option.
Pravasi Indians Group